Bitcoins - Gaining momentum among people

Do you know about Bitcoins ?

You may have read or hear about bitcoin mining. It is very buzzing and common word in today’s world. Now a days, it has become very growing competitive business. Some people consider it as a currency. Recently the US investigation agency FBI cracked down and found an online exchange using bitcoin for the trading of illegal trades.

Bitcoin is not real money. It is an online currency (virtual currency) that can be exchanged for goods and services like real currency. It is not legal in India. It came into existence in 2009. It is not regulated by any authority or regulator. It has no serial no. as like other currency have. So we cannot trace the buyer or seller through it.

Other currency is backed by gold, silver other metal or central bank. It is generated by a process in your computer called ‘mining’. A little app sits on your computer creates bitcoin very slowly in exchange for providing the computational power to process transaction. It is said that the system will not create more than 21 million bitcoins. This concept attract the people to join early to make the most of this opportunity.

There is decent incentive for small businesses to accept bitcoins- It is free to use and without any transaction fee. You can buy services of web designer, PC games, homemade ornament etc.

According to a report, in India there are about 50,000 Bitcoin user. The value of Bitcoin has increased surprisingly over the one year. At the beginning of this year the value of Bitcoin was just 13$ and now it is around 900$. According to reports, there are about 11 millions coins now. The key exchange of Bitcoins is Tokyo based Mt Gox exchange.

India’s first Bitcoin’s conference held in Banglore on 14^th & 15^th December. This is the second global conference in Asia on Bitcoins. The conference will be attended by RBI (Reserve Bank of India) and SBI (State Bank of India) also. CoinMonk named organization is trying to spread information about Bitcoins in India. It is working towards to regulate and recognize bitcoins in India.

However, Bitcoin is very far from the getting status of real currency but we cannot ignore it for future. It has potential to get the wide acceptance across the world.

For more detail and any other query related investment, you can contact me through my email

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Strict new norm for claiming HRA

Strict Rule for claiming HRA Exemption

A few days back, the income tax department has tightened the norms for claiming tax exemption for house rent allowance (HRA). HRA is the payment given by an employer to an employee for to meet the requirement of house rent.

Now, it has become mandatory to submit the PAN (Permanent Account Number) of the landlord to the employer if annual rent paid by employee more than Rs. 1 Lakh per annum. The central government has lowered the exemption limit for reporting the rent. Earlier, taxpayer had to report the PAN of the landlord, if the monthly rent more than Ra 15,000 or Rs 1.8 lakh per annum.

If the landlord does not have a PAN, the assessee has to submit a declaration to this effect along with name and address of the landlord. Even if an employee pays rent below Rs 8,333 per month, he/she has to produce the rent receipts availing the rent receipts availing deduction under HRA. However, for thos emplyee who are drawing HRA up to Rs 3,000 per month will now be exempted from producing rent receipt. The new norm has come into effect from the financial year 2013-14 or Assessment Year 2014-15.

The new rule is aimed at people claiming HRA exemption for living in their own house and claim HRA exemption. HRA granted to an employee who is residing in a house/flat owned by him is not exempt from income-tax. 

For more detail and any other query related investment, you can contact me through my email

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Insurance Sector Update - November 2013

Insurance Update – November, 2013

I am starting for now onward to simple update on insurance industry time to time. Insurance is very vital and critical part of any financial plan. It is our duty as an advisor and planner to inform our readers to update about this industry. A lot of regulatory activity is going on and companies come with new customized product. Every investor must know about this. Some recent update as given below:

• According to FICCI report, General insurance industry may touch gross written premium (GWP) 3 lakh crore by 2025 with a conservative growth rate of 13% CAGR. According to report that increased health insurance awareness would increase the opportunities in this sector.

• National Disaster Management Authority suggested that insurance should be mandatory for residential properties, malls, theaters, hospitals and hotels. It also be recommended that it should be applies on all urban property tax payers.

• Insurance regulator IRDA has increased investment limit in various category. Now general insurance companies are allowed to invest upto 1.50% or Rs, 3,500 crore in liquid mutual fund. It is for temporary time and can be reversed at a later stage.

• Life insurance companies now can invest upto 5% in FD schemes of promoter group bank. Earlier the limit was 3%. IRDA has also increased  invest limit to invest in information technology and industrial sector from existing 15% to 20%.
• Reliance life insurance has launched policy revival drive. In this campaign lapse policyholder can revive their lapse insurance policy without any penalty and medical tests subject to conditions. This offer will available till 30^th November, 2013 for all reliance insurance products.

• IRDA wants insures to stop giving high incentives to auto dealers. For pushing motor insurance policies sales, insurers offering high incentives to auto dealers and due to this policy holder are paying unreasonable premium.

• IRDS has also proposed to set up insurance clearing house. For smooth functioning of reinsurance and coinsurance business IRDA want to establish “Insurance Clearing House”. It would be promoted by Indian insurers, reinsurers and the authority.

For more detail and any other query related investment, you can contact me through my email

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Equity Investment : When should be start?

Equity Investment : Is it the right time to invest ?

I have seen the equity market has become more volatile in these days. On 31^st October it was on all time high. But honestly saying, most of the investor has missed all this share market all time high rally. I am getting so many calls from the investor about it and the very common query is that is it the right time to enter the equity market. With my experiences and studies, I can say with very confidence that anytime is good for invest in equity market. You only need discipline, long term view, good research and passion. If you have these mentioned things, share market is your cup of tea.

Most of time, I find the investor and all of those has many reservation about the equity market. They have so many reasons to not invest in equity market. Some of reason like that I had invested some money in ABC mutual fund but not got return, I have bought some shares and lost money, Now market will be go down more after that I will think about equity investment and so more reason.

What I have seen all of those person’s argument that they all have missed something before equity investment. They did not know the time horizon, investment risk and product characteristic. They have trusted blindly someone and hoped that their money would be grow many times fold in very short time span like a gamble and smuggling. I request to all of the investors please keep in your mind that investment in equity is not gambling.

Ask yourself first before any investment whether you are trader or investor. The reality is that most of us enter in the market like trader and want to make some quick money. Somewhere I have read a very interesting fact about the sensex. If you have invested in the sensex on every October over the 22 year period 1991 to 2012. You have invested Rs 2.20 lakh total investment over 22 years and the value of this investment was Rs 8,67,310 on 1^st October. I think it is handsome tax free return of 11.30% for anyone without much burden on pocket stress.

The outcome of this study that long term view, regular investment is the key of equity investment. One more interesting fact that we have witnessed all negative event like global recession, asian financial crisis. Harshad Mehta scam, dotcom bust, Ketan Parekh scam, India Pak Kargil war, 9/11 world trade center attack in US, war in Iraq, 2008 global financial crisis, European debt problem and many more. In spite of these events share market has given above mentioned return.

Right now I don’t know honestly where will be the market go ahead in short or medium term exactly but I know this is the right time to start invest if you have not invested in equity market till date. Many people have negative view on India and many people are very optimistic about the Indian market after 2014 general election. Many big broking house like India Infoline has stopped the retail broking and HSBS has also stopped the equity market operation. In my sense, all of these news are making a good ground for strong bull market but when the time will tell you only..!!!

For more detail about any other query related investment, you can contact me through my email.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Close or Open ended Fund, which one is good ?

Close Ended or Open Ended Mutual Fund which one is good?

Often we invest in mutual fund after looking past performance or on any friend’s suggestion. You do not care whether that particular scheme is suitable or not for you. So there is always confusion which scheme is good and which scheme is bad. Every mutual fund scheme are not made for all. You have to choose a good mutual fund according to your need, future goal, investment time horizon and risk profile. There is possibility that one scheme is good for Mr ‘A’ and the same scheme is not good for you. Be careful before investment in any investment instrument.

In mutual fund, you can invest between 1 day to any period based on your need. There are basically two type of mutual fund one is open ended scheme and other is close ended scheme. In open ended scheme you can enter in the scheme and exit from the scheme at your chosen time. Close ended schemes come with some defined lock-in period. You cannot exit from these schemes before lock-in period.

The lock-in period varies from few months to 4 - 5 years according to investment objective of particular scheme. Some investment instrument need time to be able to generate good returns. Closed-ended funds provide proper timeframe to fund manager and investors to cultivate this opportunity.

At current scene, when whole mutual fund industry face redemption pressure from the investor due to turbulent market condition. Since January, Rs 10,694 crore has moved out from equity schemes as outflows. Fund houses come with more close ended schemes. ICICI Prudential, Union KBC, Reliance MF and Axis MF have launched closed-ended equity schemes since last few months. A lock-in product would help fund houses deliver better returns over the longer run, as many mid- and small-cap stocks are trading at cheaper valuations now.

In a closed-end product, investors would remain for the entire duration, whether three or five years, whereas in an open-ended scheme, the investor can move to another one at any point. From investor point of view, the can also the take advantage stay invested in schemes as stock valuation is very cheap in current market.

For more detail about any other query related investment, you can contact me through my email.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Few Points for Old Age Financial Freedom

Some Sutra for old age financial freedom

After a long 15 days vacation spending in my native place, I have came back to my daily routine life. My native place is Kanpur. I have also travelled many places in hinterland and met many people. There is some good news that the new or you can say younger generation is very serious about their financial future. The new generation now have hunger for knowledge and growth which is good sign for India. They understand better the difference between saver and investor. In typical saying we Indian are good saver but not good investor but I hope with all my positive energy this saying would change soon. India would be country of great investor. We will deliver more and more Warren Buffet.

In today’s short blog, we will discuss some important aspects for secure future. We often explore personal finance options at later stages of life when we have lost out on the opportunity to make the most of "power of compounding". Personal finance is one area which is almost ignored during our upbringing to become adult. There are few points which we should keep in our mind for secure future planning.

Buy Insurance at early age: Recognize your life and general insurance need. Keep in mind that insurance is not return generating asset, it is only a financial protection for yourself and your dependents against unfortunate emergencies. Be smart and get a good health insurance plan as early as possible.

Set realistic future goal: Apply SMART approach for your future goal. Simple, Measurable, Accurate, Realistic and Time-bound goals can be achieved easily. Don’t ignore inflation, interest rate movement and time horizon.

Start saving early. Make sure you could save upto 25% at your early earning stage as later it is very difficult to save. When you start save early, it make you more confident and happier. You can also gain from “power of compounding” through early saving.

Never blindly copy of others: You financial goals and condition may not be similar to that of your friends. Each person have different need, goal and risk appetite. Analyze your need, goal and risk appetite and invest accordingly

The conclusion of this article is that saving for future is essential part of everyone's life and all you need to do is start today and start small.

For more detail about any other query related investment, you can contact me through my email.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com